Russia and the EU Race to Modernize

Russia emphasizes the economic, Europe the political and moral. An ideological great game by any other name may just be two paths to a common end point

Modernization has only recently emerged as a pivotal theme in Russia‚Äôs relations with the EU. It was first set out in the framework of the St. Petersburg dialogue between Russia and Germany in 2008, and has been ever more central in the EU-Russian agenda since 2010. This centrality is perhaps only logical, given that modernization responds to two of the key goals of Russian foreign policy ‚Äď to lever international economic relations for Russian advantage, and to promote Russia‚Äôs stature as a key player in the global politics of this century.

But modernization ‚Äď as a policy construct ‚Äď can easily be held to mean different things to different parties. It is difficult to trace the first mention of the word ‚Äėmodernization‚Äô in any official post-Soviet document. Some aspects of a proper ‚Äėmodernization‚Äô strategy were already set out in Russia‚Äôs 2008 foreign policy concept, which identified ‚Äúfavourable external conditions for the modernization of Russia‚ÄĚ as one of the country‚Äôs strategic objectives. It described modernization as, first and foremost, ‚Äútransformation of [Russia‚Äôs] economy along innovation lines, enhancement of [Russia‚Äôs] living standards, consolidation of society,‚ÄĚ as well as ‚Äúensuring competitiveness of the country in a globalizing world,‚ÄĚ and, second, the ‚Äústrengthening of the foundations of the constitutional system, rule of law and democratic institutions, realization of human rights and freedoms.‚ÄĚ Two essential tracks of Russian modernization ‚Äď one economic, and one political ‚Äď emerged from this strategic concept.

Russia soon began to place peculiar emphasis on the economic aspects of modernization, while neglecting the political ones. The Russian vision was further developed in 2009 ‚Äď most prominently in then-President Dmitry Medvedev‚Äôs Rossiya vpered policy statement, and then in his 2009 Address to the Federal Assembly. Medvedev mentioned both the economic and political tracks of modernization, but elaborated them very differently. For economic modernization, he outlined five priority goals for Russia: energy efficiency; nuclear energy; information technologies; space technology and telecommunications; and medical technology and pharmaceuticals. For political modernization, although Medvedev argued that democracy was essential for prosperity, he stressed that ‚Äúno one will live our lives for us‚ÄĚ ‚Äď an allusion to the idea of ‚Äėsovereign democracy‚Äô ‚Äď that is, that although Russia is constructing a democracy, it is for Russia alone, and not outside observers or players, to determine the specific trappings of its democracy, consistent with its history, traditions and realities. He conceded that Russia might need some strengthening of its institutions, but argued that ‚Äď in principle ‚Äď all of these were already well-developed.

The approach of the EU has always been markedly different. At the November 2009 EU-Russia summit, it stressed the primacy of the political dimension of modernization. This was perhaps to be expected, given that the EU has ‚Äď almost from its birth ‚Äď been positioning itself as a normative power that promotes the values of democracy, human rights and the rule of law. Brussels‚Äô message and institutional logic have long been that stable and innovative economic development is only possible if democratic institutions are in place. Accordingly, in its discussion with Russia on the intricacies of the future Partnership for Modernization, Brussels emphasized the indispensability of the rule of law and the need for reform of Russia‚Äôs judicial bodies.

The final EU-Russian Joint Statement on the Partnership for Modernization integrated both visions. It started with the Russian vision of modernization, stating that ‚Äúin a world in which peoples and economies are ever more closely connected and interdependent, modernizing our economies and societies becomes ever more important and necessary.‚ÄĚ But then it went on to include the EU‚Äôs vision by noting that the EU and Russia will ‚Äúaddress common challenges with a balanced and result-oriented approach, based on democracy and the rule of law.‚ÄĚ The Statement also fixed priority areas of cooperation. These included investments; trade and other economic relations; support for small- and medium-sized enterprises; approximation of technical regulations and standards; development of transport and of a sustainable, low-carbon economy; energy efficiency; cooperation in research and innovation, as well as in space; addressing the social consequences of the market economy; effective functioning of the judiciary in the fight against corruption; and promoting Russo-European people-to-people links and dialogue with civil society groups.

In the Statement, Russia‚Äôs priorities were closely intertwined with those of the EU: reform of the judiciary; anti-corruption; and dialogue with civil society. At the same time, political aspects of modernization were mentioned only to the extent that they were linked to economic transformation. Ever since, the rivalry between the two conceptions of modernization has manifested itself in procedural debates about how to develop the various priorities of the Partnership, in substantive arguments during regular summits, as well as in different speeches by Russian and EU politicians and decision-makers. A more interesting, covert manifestation of this rivalry has been the increasingly active promotion ‚Äď by Russia and the EU alike ‚Äď of their visions of modernization outside of their immediate bilateral relations, paving the way for what may be termed a ‚Äėmodernization race.‚Äô

Russian strategy in this ‚Äėmodernization race‚Äô has followed two tracks. The first track is based on cooperation with EU member states. To date, 23 of the EU‚Äôs 27 member states have signed declarations or memoranda on modernization with Russia. (Two more such declarations or memoranda ‚Äď with Portugal and Greece ‚Äď are in the pipeline.) The drafts of these declarations and memoranda were prepared and promoted by Russia‚Äôs Ministry of Economic Development (MED), which did its level best to promote ‚Äď to the exclusion of most other considerations ‚Äď the primacy of economic aspects. All of these documents stress the necessity of facilitating trade and investments, and to support Russia‚Äôs accession to the WTO. (Although Russia was invited to join the WTO in December 2011, its accession is still not complete and not a foregone conclusion.) They also deal with cooperation on nuclear energy and space technologies; research and development of innovative technologies; energy efficiency; and, among other things, environmental protection.

The second track consists in the signature of modernization partnerships with countries outside of the EU ‚Äď namely, non-EU European states (Switzerland, Norway and Iceland), Asian partners (South Korea, China and Japan) and, most recently, the US. In the discussions with non-EU European countries, political aspects of modernization were ‚Äď to be sure ‚Äď evoked but, as with the various EU member states, these were ultimately treated as secondary in importance. The memoranda with Asian partners, signed contemporaneously with the European texts ‚Äď between October 2010 and November 2011 ‚Äď were exclusively about economic modernization, and avoided any reference whatever to political reforms. The same applied to the memorandum with the US, which focussed on the commercialization of the results of research in Skolkovo ‚Äď a controversial Russian techno-park.

In the aggregate, Russia‚Äôs two-track strategy has ‚Äď for all practical intents and purposes ‚Äď proven that the country is able to dictate the terms on which other countries ‚Äď both within the EU and outside of it ‚Äď engage in the reform of Russia. For its part, the EU has ‚Äď until very recently ‚Äď been considerably more passive than Russia on the ‚Äėmodernization‚Äô front. But a new line of action has now clearly emerged. Two developments suggest its logic. First, the EU has begun to increasingly link its technical assistance for neighbouring countries like Moldova to the discourse on (political) modernization ‚Äď including aid to reform political institutions.

Second, the EU has developed a modernization strategy for Belarus, which is the most problematic state in, and for, Europe in terms of democracy, respect for human rights and the rule of law. Initially, at the Eastern Partnership summit in September 2011, Polish Prime Minister Donald Tusk mooted the creation of a modernization package for Belarus. The idea was fleshed out by the European Commission, which in March 2012 launched the European Dialogue on Modernization with Belarusian civil society groups. The purpose of the Dialogue is to balance a growing austerity toward official Minsk with the assistance for democratization and the rule of law targeting Belarusian civil society and opposition formations.

As if the matter needed clarification, the word ‚Äėdemocratic‚Äô was essentially equated to ‚Äėmodern‚Äô in a speech by European Commissioner Stefan F√ľle following the launch of the new modernization programme for Belarus. In that speech, F√ľle emphasized ‚Äúa multi-stakeholder exchange of views and ideas between the EU and representatives of the Belarusian civil society and political opposition on necessary reforms for the modernization of Belarus and on the related potential development of relations with the EU.‚ÄĚ The focus of the Dialogue is to be fourfold: political reform; reform of the judiciary and people-to-people contacts ‚Äď both ‚Äėpolitical aspects,‚Äô for all intents and purposes ‚Äď as well as economic and sector policy issues; and also trade and market reform.

So the EU, while slow out of the gate, has now, with ever intensifying energy, taken on the challenge of promoting its particular vision of modernization. Curiously, the EU has ‚Äď at least to date ‚Äď used the word ‚Äėmodernization‚Äô principally in the context of its relations with Eastern Europe ‚Äď traditionally viewed by European analysts as part of a common neighbourhood with Russia. The result has been a de facto ‚Äėgreat game‚Äô of contested leadership for Eastern Europe between Europe and Russia: Moscow evidently still aspires to lead in this region. On the other hand, the EU would increasingly like to direct the processes of political and economic reform in Belarus, Moldova and Ukraine.

On the whole, therefore, we see that Russia advances its modernization vision bilaterally with EU capitals, as well as through its relations with other powers in the world ‚Äď all the while positioning itself as an indispensable player in global politics. The EU, meanwhile, advances its vision through its positions in those theatres that it otherwise contests ‚Äď strategically ‚Äď with Russia.

As the modernization race ‚Äď or, more precisely, the race between modernization conceptions ‚Äď gains strength, it also appears to be producing an ironic consequence ‚Äď namely, a certain convergence of the EU and Russian visions of modernization. This convergence is driven by multiple factors, of which we may identify four ‚Äď two on the EU side, and two on the Russian side.

First, the current economic crisis has raised serious questions about the stability and sustainability of the EU‚Äôs economy ‚Äď and, in particular, about the stability of the euro as a common currency. For now, budgetary austerity has been privileged as regional economic policy. But, as the recent elections on the Continent show, it is increasingly becoming plain to European political leaders that the crisis can only be overcome if growth is relaunched. Given the recent austerity measures, of course, the EU has limited public money with which to play. Official and unofficial talk has therefore turned to how to use global trade in goods and services, as well as global financial flows, in order to promote growth. As a result, the EU has, in practice, increasingly been willing to put aside or suppress bits and pieces of its normative agenda for the sake of economic interests.

Second, and also certainly related to the economic crisis, the numerous modernization dialogues between Russia and individual EU member states have shown that these states are, for the most part, very willing to privilege economic modernization over political modernization.

Together, these first two dynamics militate against the potency and coherence of the EU‚Äôs vision of modernization. They also sap the champions of this particular vision of their will to push their cause.

Third, while Russia continues to insist on the primacy of the economic approach to modernization, it is ‚Äď paradoxically ‚Äď increasingly willing to incorporate aspects of political modernization in official state documents. Moscow went along with Brussels in incorporating political aspects of modernization (reform of the judiciary) in the aforementioned first Joint Statement on the Partnership for Modernization. While equality between the EU and Russia is presumptively guaranteed in the economic parts of their Partnership for Modernization, the political parts implicitly recognize that the EU already enjoys benchmark standards, whereas it is for Russia to follow suit in the reform of judicial institutions or in the broader fight against corruption.

Furthermore, Russia has been willing to incorporate aspects of a political vision of modernization into its dialogues with individual EU member states. Numerous references in Russia‚Äôs bilateral declarations and memoranda with these states suggest that Moscow is open to making concessions ‚Äď judicial reform; anti-corruption; enhancement of civil society space; rule of law; and broader democratic guarantees ‚Äď to the particular demands of different national capitals in order to further promote (economic) modernization. But by making such concessions, it implicitly acknowledges ‚Äď or yields to ‚Äď the need for, and imperative of, political modernization.
Fourth and finally, as a purely logical proposition, it is often argued that economic modernization itself promotes political modernization. Increased economic development eventually requires stability of legislation, predictability of investment climate and the rule of law. Increased affluence in a country also means a growing demand for political freedoms, for democracy and for increased respect for human rights. The numerous demonstrations that took place in the 2011-2012 election period in big cities across Russia are good illustrations of this path dependence. It is a trend that will certainly continue.

It may be turning out, then, that instead of competition between the political and economic visions of modernization ‚Äď championed respectively by the EU and Russia ‚Äď we are witnessing the unintended convergence of these two approaches to modernization. The EU‚Äôs approach is top-down in the sense that it posits political aspects as essential to the creation of the conditions and the environment for economic modernization. The economic modernization favoured by Russia is bottom-up in character: it starts with the creation of basic conditions for the improvement of material standards of life, which then issues in a more general demand for political change ‚Äď if only in order to stabilize the prior economic transformations. The net outcome, however, is that the EU and Russia may well ultimately meet at some common point in their visions of modernization, which will inevitably consist of a combination of the political and the economic. That will not happen tomorrow, and it will not happen without a fierce race of modernization conceptions to begin with. But the convergence is bound to happen in the next 10 to 15 years.

Tatiana Romanova is Associate Professor and Jean Monnet Chair in the School of International Relations, St. Petersburg State University.